31 Employee Incentives for Lowering Your Turnover Rate
The past few years have been anything but consistent.
In 2020, the U.S. economy shrank at an annual rate of 32.9% — the worst in American history. Millions of people lost their jobs while others struggled to adjust to remote work.
Yet, out of that inconsistency and turmoil, the U.S. Bureau of Labor Statistics (BLS) reported an annual total separations rate of 57.3% — most of which were actually voluntary quits.
Zippia found that companies lose 12% of their workforce to voluntary turnover each calendar year. So it's no surprise that 47.4 million out of 68.9 million who were laid off, quit, or discharged in the past year were voluntary quits.
In 2021, a BLS report found that 4 million people left their jobs in April. By November, the number of employees who quit had risen to 4.5 million — all in search of better benefits and opportunities.
Why is there such a high employee turnover rate? The most common reasons given for leaving a company were:
So, even with an efficient hiring process to recruit the best candidates, some of your staff will leave your company at some point. You still need to work on employee retention.
How do you deal with high turnover and keep your valuable employees for as long as possible?
Read below for 31 employee incentives that can help lower your overall turnover rate in the face of a tidal wave of resignations.
1. Provide Competitive Wages
Employees need a living wage to pay for food, shelter, and other basic needs. Depending on your business’s budget, you will want to pay your employees the maximum amount for their work.
Of course, you must comply with your state’s minimum wage requirement. But you can go further and conduct market research on the way your competitors pay their employees. This involves investigating the wages of other companies in your area that are paying employees doing the same work.
2. Offer Health Insurance
Depending on the size of your company, providing health insurance may or may not be mandatory.
In the U.S, the Patient Protection and Affordable Care Act of 2010 does not require companies employing 50 or fewer employees to provide workers with health insurance. However, it’s a popular employee incentive for finding and keeping highly qualified workers.
3. Allow flexible work schedules
As far as your business permits, provide your employees with the incentive to work flexibly on a regular basis. This way, your team can enjoy a healthy work-life balance to care for their families, go to important appointments, and pursue personal interests.
Even if your business needs make flexible working too complicated, you can offer incentives like flexible lunch hours or break times in a given period.
4. Give recognition
Employees want to know you appreciate them. Pay attention to the work they’re doing and provide them with verbal praise and other tokens of appreciation when you see them performing well.
For instance, express your appreciation when your current or even new employees complete a challenging project before the deadline.
5. Show public appreciation of your best employees
Use social media to shout-out your employee of the month or other employees who have achieved great results. Public acknowledgment will reward your best people and help catch the eye of qualified candidates who are looking to apply for your job openings.
6. Make career opportunities available
Many employees may enjoy their jobs — until they feel that there is nowhere for them to advance or grow within your company. Depending on the size of your company, there are a few ways to let your employees know there are different career paths they can advance within your company.
Some employees may want to be promoted to a management position. Others may simply want to move from one job function to another.
For instance, you could have an employee you hired to work in sales, but they’ve shown a technological interest with a promising aptitude. Let them know about positions of interest available in your company before you start the recruitment process for external candidates.
8. Invest in the right technology
Aim to streamline your employees’ work. Make room for them to do more meaningful work by automating some tasks that can be time-consuming and rack up unnecessary costs.
For example, if your employee is creating and managing staff schedules manually, you can use Deputy to streamline your scheduling process. That way, you can reduce the frustration of the manager who organizes shifts and that of your shift workers.
9. Provide retirement benefits
Small businesses have options for retirement plans to offer their employees, including the Individual Retirement Account (IRA).
NerdWallet recommends that small business owners or self-employed individuals arrange for a Simplified Employee Pension (SEP) IRA retirement account. Here, business owners and self-employed individuals can put money away for the future and enjoy tax breaks.
If you have a tight budget, consider a multiple employer plan (MEP) to provide their employees with a retirement plan. This is a single plan sponsored by multiple employers, which is common among organizations, such as professional employee groups and trade associations.
10. Give discounted insurance plans
Employees could be liable for paying for different types of insurance themselves.
However, you may secure reduced group rates that will help your employees manage their finances. Such plans could include auto, life, homeowners, long-term care, or identity theft.
11. Make vacation and sick leave available
When deciding to offer vacation and sick leave, be aware of your state laws to ensure your state doesn’t require sick leave for businesses of particular sizes.
12. Offer discounts on goods or services
Some employers may offer their employees discounts on the goods or services they sell. Another employee incentive idea is to forge a partnership with other businesses to offer reduced prices to employees of those partnership companies.
13. Provide disability insurance
Disability insurance gives employees the assurance that they will have their basic needs met by providing at least partial pay if they should experience an illness or injury unrelated to their work.
There are a few states that like New York, Hawaii, California, New Jersey, and Rhode Island require all employers to provide short-term disability coverage.
14. Demonstrate your respect for family life
Make sure your employees feel comfortable when they have to take a day off or work from home because of a child’s illness, snow day, or half-day at school.
If you work with hourly staff, ensure that you have a seamless process for them to communicate with you when they’re unable to come to work.
Deputy allows your workers to notify you quickly and easily when they can’t attend work. And, it will suggest shift swaps — considering factors like pay grades, overtime requirements, and whether predictive scheduling laws apply.
15. Provide the best equipment for your employees
Are your employees’ computers or monitors light years behind those in standard use by most workers in your industry? Do their chairs cause them discomfort?
Show them you care about their experience at work by supplying them with the best equipment you can afford.
16. Put together a state-of-the-art office
This is an unusual incentive idea. Pull together all the best office amenities your facility can accommodate — for instance, standing desks and the latest in ergonomically designed chairs for employees who choose to sit at a desk.
17. Have a party
Have an occasional meal catered at your office. Arrange with your local restaurant to deliver nutritious and healthy meals that your team can enjoy over lunch. You can add music to the lunch for a party atmosphere.
18. Establish a casual dress day
If your employees are required to dress in professional clothing most of the week, consider designating Friday as a day to dress more casually as your business needs permit.
19. Conduct occasional meetings to allow employees to share about themselves
Everyone likes to share their interests and personal activities with their co-workers. Schedule time for your team members to get to know each other better. This activity can further enhance employee cohesiveness.
20. Reverse your company hierarchy
Arrange a day or an event where the bosses serve lower-level employees at a lunch or picnic. This will give employees the feeling of being valued and appreciated.
21. Foster an atmosphere of positivity
There are many ways to foster a positive workplace atmosphere. For example, recognize particular employees for positive contributions they’re making to your business. You can also encourage random acts of kindness among employees.
22. Incentivize community service
Pay your employees for time they take off work to serve their communities in ways that are meaningful to them. You can also donate to nonprofits that your employees vote for.
23. Communicate openly with your employees
Make sure your employees are aware of your company’s status, whether it’s good or challenging. Encourage a leadership style that values open communication to avoid rumors spreading.
24. Establish an educational assistance program
Encourage your employees to get further training in their field, which can help them move forward in your company by assisting them with college or trade school fees.
25. Offer additional vacation
Give your employees an extra day off after they have achieved a specific target. Extra vacation days have a positive effect on productivity.
Zippia found that 63% of workers would turn down a job offer if it didn’t include paid time off and, after taking time off, they’d be more productive, relaxed, innovative, balanced, and engaged.
26. Provide your employees with free or discounted gym memberships
Encourage your employees to maintain their health to benefit themselves and your business. Offer a fully-paid gym membership, if possible.
For smaller businesses, if paying the entire membership fee is too expensive, you can offer to cover a percentage of the fee instead.
27. Maintain a general atmosphere of respect
Respect is an often overlooked incentive idea. People want to work in an environment that values diversity. Encourage a leadership style that places an emphasis on respecting the values of different groups of people.
28. Treat your employees as individuals
Take an active interest in your employees. Make appropriate inquiries about their lives outside of work to help them feel valued as a human being — not just a worker.
29. Survey your employees
Ask your employees about the work incentives they find valuable. You may have an idea that one type of reward would work best for your team but they may appreciate something else. Show that you value their opinions by finding out which incentives they would prefer.
30. Create a funny award
Make your next office party more fun by creating awards with funny names. Recognize employees who have gone above and beyond in different aspects of your company. Awarding names with a twist should be fun for all involved, so the names should be funny but remain respectful.
31. Offer employees occasional double break time or lunchtime
Reward your employees with longer lunchtime or extended breaks as an incentive for meeting specific goals. You could also offer a longer lunch break once a week so that employees have time to catch up on personal errands.
Employee incentives should be a constant theme in your business. Your leadership style and workplace culture should reflect an environment of appreciation. Give them the right tools to do their work as efficiently as possible.
Slow Down the Revolving Door
A happy workforce is a productive workforce. As a manager, you want to have engaged employees, which is the most significant competitive advantage for your company.
There's no specific formula for achieving a low turnover rate. However, you can help your team put in nothing less than their best effort and complete their assigned tasks.
The first step is to get a workforce management solution.
Deputy takes the hassle out of creating and sharing employee schedules, and frees up your managers to focus on building strategies that better your business.
Sign up for a free trial and find out what Deputy can do for your team and business.